Average property prices in the South East will rise to over £322,000 in the next five years, representing a rise of 40%, according to a National Housing Federation report.

The report, which used projections by Oxford Economic Forecasting, found that property prices will continue to rise due to a severe lack of housing supply and a growing population.

Derek Cash, head of south region at the National Housing Federation, said: "Our projections may seem like good news for current homeowners in the region, but they actually spell disaster and not just for tomorrows first time buyers.

"People will be unable to find a home in the area where they grew up and key public sector workers will have to move to cheaper parts of the country to ease their housing problems, making essential public services in the region more vulnerable.

"This will not help build the balanced neighbourhoods required for sustainability, which will have devastating consequences on communities - both rich and poor alike."